BSports Toto downgraded, stock slides

Berjaya Sports Toto Bhd, a Malaysian lottery operator, was downgraded to “neutral” from “buy” at OSK Research Sdn Bhd after announcing a lower dividend.

Its fair value was raised to RM4.72 from RM4.65, OSK said in a report today. -- Bloomberg

The stock dropped the most in more than a month in Kuala Lumpur trading, sliding 1.3 per cent to RM4.46 at 9:06 a.m. local time, set for its biggest drop since May 12. -- Bloomberg

CIMB Research maintains Neutral on BToto, RM4.75 target price

KUALA LUMPUR: CIMB Equities Research said BERJAYA SPORTS TOTO BHD []’s results for the financial year ended April 30, 2011 were broadly in line but maintained a Neutral outlook due to the lack of near-term earnings growth.

It said on Tuesday, June 21 that core net profit was 3% above its forecast and 4% above consensus because of better-than-expected margins arising partly from a lower prize payout. The final single-tier dividend per share (DPS) of three sen took full-year tax-exempt DPS to 21.0 sen, which was marginally above its 20.5 sen estimate but below FY10’s 57.5 sen.

“We are tweaking our FY13 earnings upwards by 1% for house-keeping purposes while maintaining our forecasts for other years and our DDM-based target price of RM4.75.

“BToto remains a NEUTRAL as it lacks near-term earnings catalysts beyond the introduction of its 4D+Jackpot variant. We prefer higher-beta plays such as GENTING BHD [],” it said.